Video: Gas prices hit $4.39 a gallon in the Twin Cities

posted at 2:31 pm on May 18, 2013 by Ed Morrissey

A couple of weeks ago, I was griping that I had to pay $3.50 a gallon or so after a longtime partnership between my grocery store and a local gas station was canceled. Yesterday, I had to fill up my tank again … and I practically had to fill out a loan application. The price at the pump in my neighborhood was $4.39 a gallon, as gas prices have suddenly skyrocketed in the Midwest:

Gas prices are above $4 a gallon at many stations across Minnesota, and experts believe the high prices could last at least a month.

AAA tells KSTP two large refineries in the Chicago area closed, which has decreased some of the supply in the Midwest.

The switch to summer grade fuel is also causing a spike in prices, and some experts say it could be linked to unrest in the Middle East, which impacts the price of crude oil.

According to AAA, the highest average price on record for the state is $3.98, which was in 2008.

We normally have relatively inexpensive gasoline in the Midwest, but this week we actually outstripped California. USA Today calls this “a rollercoaster year” for drivers, and notes that prices are breaking records in this part of the country. Refinery capacity is once again the issue:

Troubles at several oil refineries are driving gasoline prices sharply higher in the Midwest, and the regional shortages are expected to boost pump prices nationwide.

Gas prices in Minnesota, Iowa, Missouri, North Dakota, South Dakota, Nebraska, Ohio, Oklahoma and Wisconsin have spiked up to 40 cents a gallon the past week alone. Behind the rise: outages and extended maintenance has curbed output at refineries in Joliet, Ill., Whiting, Ind; Tulsa, Okla, and Eldorado, Kansas.

While the USA may be dripping in new found crude oil deposits and early May supplies were at their highest levels since the early 1930s, issues at a handful of refineries that turn crude into gasoline and diesel fuel underscore how kinks in the supply chain can cause quick surges in what consumers pay at the pump.

In Minnesota, regular, unleaded gas averaged $4.15 a gallon heading into the weekend — an all-time state record. That makes Minnesota the priciest state in the continental U.S., overtaking California, averaging $4.06 a gallon. In oil-rich North Dakota, prices average $3.98, also a record-high.

We’ve repeatedly noted the issue of refinery capacity and its lack of expansion over the last 30 years. A major new refinery will be built in North Dakota to handle the huge deposits of crude being extracted, but until it opens, shortages in refined product will continue to occur — and price spikes, too.

And that’s bad news for the national economy, too, since these shortages will likely drive prices up nationwide:

The price surge in the Midwest could have a broader economic impact. Thursday, the Labor Department said April’s drop in gas prices helped push consumer inflation down 0.4% Earlier this week, the Commerce Dept. cited lower priced gas for spurring a slight gain in April consumer spending.

Rising gas prices will likely reverse both trends, however.

Don’t forget that gas prices have a multiplier effect, too. Any products that come to market via truck — such as produce, especially — will start costing more in the grocery stores. That will drain even more disposable income from households and leave a lot less money for luxuries.

It’s going to be a long, expensive summer — and don’t be surprised if Midwesterners opt for more “stay-cations” during it.

I am actually surprised that North Dakota is building a refinery. Didn’t we have a story about the Hess refinery in N.J. closing and that the refinery part of the oil business is so expensive? I can’t imagine the legal and regulatory hoops these folks have to jump through. The Libs are determined to get us, one way or another.

I am actually surprised that North Dakota is building a refinery. Didn’t we have a story about the Hess refinery in N.J. closing and that the refinery part of the oil business is so expensive? I can’t imagine the legal and regulatory hoops these folks have to jump through. The Libs are determined to get us, one way or another.

Cindy Munford on May 18, 2013 at 2:40 PM

Read about that months ago.

They have to build it…Regionally they’re producing it so fast it’s causing backup at the refineries all over.

They tried that in Florida. Twice. First North to South and when that didn’t fly, East to West. And when the citizens said NO, they are still trying to work around us. High speed rail is apparently magic and the answer to every ill in the world.

Yep. Supply and demand. The shortages in the Great Lakes areas have effected Missouri as well. Ripple effect. As we are told they are rerouting fuel up there. That coupled with the refineries shutting down for maintenance in Kansas and Tulsa, OK., plus the reformulation changes.
I paid $3.18 a gallon two weeks ago at Sam’s Club and now they are $3.81 and rising. The libs down here are crying oil company collusion. But what we need are more refineries, the last large refinery was built in Louisiana back in 1977. They’ve only built a few smaller ones since then. They also need to cut out the ethanol garbage, and cut the gas taxes.

I remember the good ol days..(80’s)
hopping in my grandparents RV and summer road trips.
No more.
Awesome economic booster.
Especially, for our state that relies on tourism.
Hell, people can’t even pay to drive to work.

Don’t forget that gas prices have a multiplier effect, too. Any products that come to market via truck — such as produce, especially — will start costing more in the grocery stores. That will drain even more disposable income from households

See, that’s why the price of gas and food is not a factor in CPI…to keep people like us from freaking out !!!

I left CA to drive to TX on 4/27, and ARCO (our price leader) was selling 87-octane for $3.659; I came back two weeks later and was greeted with $3.899 at the same ARCO station – it’s even higher now.
In Seguin TX, I paid $3.299!

The price surge in the Midwest could have a broader economic impact. Thursday, the Labor Department said April’s drop in gas prices helped push consumer inflation down 0.4%

.
You are quoting the Labor Department, the Official Liars of the SCOAMF Administration, but have you forgotten that the cost of food and gasoline is NOT included in the government’s inflation calaculations?

Wouldn’t be surprised to learn that this is just another attempt by President Passerby to further punish the American people for not kissing his ass as much as the media does. All the Sequestration crap he pulled, like closing down White House tours and grounding the Blue Angels didn’t get the expected contrition from us, so know he’s going to hit us where it really hurts.

The refining process for Natural Gas is MUCH cheaper than for crude oil.

Your car will run just fine on Liquified Natural Gas.

All that needs to be changed are the rules at EPA and carburetors which are available, that allow your car to run on gasoline, ethanol, Propane or LNG. (They sense the different fuel and talk to you cars computer.)

So instead of plugging your electric car into an outlet at home, you would plug it into the gas line at your home to refuel. Take about 10 minutes.

AND NO MORE FUEL TAXES, which is why it will never happen on a broad scale.

A low volume NG to LNG compressor with tank would produce from 10 to 50 liquid gallons of LNG per day. Depending on how many cars you have. You could also fill up at a station if you lived in an apartment or were taking a longer trip. But since your vehicle can still run on regular gasoline, you can also go to a traditional station.

According to Tulsa TV, both Tulsa refineries for scheduled turnaround. Owners evidently are putting much more into them. However, as in central station turnarounds, the owners try to schedule at the time of lowest need or usage. Depending on the weather, sometimes they guess not-so-good.

They tried that in Florida. Twice. First North to South and when that didn’t fly, East to West. And when the citizens said NO, they are still trying to work around us. High speed rail is apparently magic and the answer to every ill in the world.

Cindy Munford on May 18, 2013 at 2:52 PM

These Florida high speed railroad schemes have been kicked around since at least the ’80s.

The Florida GOP simply doesn’t want Obama’s money for this particular boondoggle. And it’s not that I don’t think it makes sense to connect Orlando to the Atlantic and Gulf beaches, because it does, but obviously these schemes have been consistently mishandled over the decades.

Always a big question is, “who’s going to pay for it all?”. There is no state income tax, so they’d have to increase sales taxes, tourism-hotel taxes, and I suppose individual counties and cities along the route would increase their sales taxes, business taxes and property taxes as well.

Remember that not everyone in Florida lives in Orlando, nor do most Florida citizens depend directly (or I can maintain even indirectly) on tourist dollars that I suspect largely end up in someone’s pockets somewhere else.

Also, many of us were living quite well in Florida before Disney World was even open.

I live in North Florida. Do you really think the tourist industry is big enough to pay for rail from Orlando to Tampa? Will there be enough satellite transportation at either end to get the “masses” where they are going? Somehow I don’t equate this short distance scheduled moves the same as airline schedules where I’m saving a lot of miles and time.

Hey guys, I know it will be a shock to you, but most of the price is not a conspiracy. Refinerys require scheduled turnarounds or you get lots of “roman candles” , bad smells, and yes, that is when they upgrade EPA compliance. For the first time in history, Tulsa is getting hit more than the rest of you, because this is a two-fer. This has nothing to do with the pipeline from Canada.

There may be some other transportation problems, though. BN is stacking southbound tanker trains from Tulsa out to Claremore on the old Frisco line. Don’t know what is in the tanks though.

These Florida high speed railroad schemes have been kicked around since at least the ’80s…

Always a big question is, “who’s going to pay for it all?”. There is no state income tax, so they’d have to increase sales taxes, tourism-hotel taxes…

Dr. ZhivBlago on May 18, 2013 at 5:21 PM

Precisely the conundrum faced by California right now. CA-HSR officials are hoping to start construction on that vital billion-something dollar 30-mile Medera to Fresno link in another month (I say “vital” because until they build this, no one knows exactly where Medera is). They’re counting on $3.3 billion in federal funds, but those have to be matched by California money, which is being raised by a $10 billion bond issue authorized by Prop !A in 2008.

To date, CA has sold about $700 million in bonds. And now they have to stop, pending hearings by a Sacramento County Superior Court judge on a suit filed in 2011 by Kings County to stop bond sales, claiming that current HSR plans don’t match anything that was authorized by Prop 1A, including a requirement that the state have all the money in place and all have all the necessary environmental approvals (which Gov. Moonbeam is attempting to have waived) before first phase of construction begins.

State tried an end-run round the suit by filing a highly unorthodox “validation action,” encouraging everyone with a claim against the HSR to sue the state, which suits would be lumped together with the Kings County suit… taking a looong time during which CA could sell more bonds and start construction.

Gambit failed and hearing starts at the end of the month on whether California can continue to sell bonds to match the federal money to build the railroad, brother can you spare a dime?

Florida has been wise to avoid this scenario. Besides, if a north-south or east-west HSR is such a great idea, wouldn’t private enterprise jump on it?

There’s another reason. Spring planting is late in much of the midwest due to cold weather. The farmers are right now in a massive race to get fields planted. They are using fuel like gangbusters. If they don’t get fields planted by this weekend, they may not get a crop in time to beat the winter frost. Yields drop off significantly every day after May 15 the crops are planted.